CFTC Exempts Crypto and Prediction Markets Software Providers From Broker Classification

The US Commodity Futures Trading Commission (CFTC) has issued a no-action letter, exempting eligible crypto and prediction markets software providers from broker registration requirements.

Importantly, a “no-action” position is an official statement from a regulator that it will not pursue enforcement actions against an individual or entity for a specific action.

Crypto and prediction market developer freedoms

According to the announcement made today, the relief applies to developers partnering with regulated platforms under the following conditions:

1. The developer has to maintain zero discretion over trades, meaning the user maintains absolute control over every trade.
2. The developer never assumes custody of users’ assets.
3. The developer never takes up volume-based dynamic commissions. This means they are banned from taking a “cut” of the trading volume passing through the software.

Before this official statement, the CFTC had set a precedent for this kind of developer regulation by granting a no-action position to Phantom Technologies in March. The Phantom Wallet provider now continues to partner with Kalshi prediction markets as a non-custodial passive interface provider, without needing to register as an introducing broker.